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What Does It Cost To Market Your Business?

By Jacqueline Drew
START Marketing Inc.
www.startmarketing.com

As a marketing consultant, the most common question people ask me when they call is, “What’s it going to cost?” Which is kind of a funny question, because although I can generally ballpark the cost building a marketing or business plan, what people really want to know is “What’s it’s ALL going to cost…as in…ALL this marketing stuff I should be doing…what’s that going to cost?”

But really, how do I know whether they want me to help them get one or two new clients, or on the flip side, to make themselves and their businesses famous around the whole of North America? Planning costs of these will vary somewhat, but the implementation costs are really what’s different.

Now, some marketers will tell you there should be a rule about it – like 5 to 10% of revenues going toward advertising costs. And that’ll work for perhaps maintaining a level of sales. But most clients I see are looking for big growth – as in, “let’s see if we can double ourselves in the coming year” – or more. And do you think 10% of existing sales is going to do it? Probably not. And if a company is new, and has no sales to speak of – does that mean they should spend 10% of nothing? Of course not!

Here’s an example. One of my clients recently realized they needed a brand new client base – they’d been relying on one big account for too long, and that big account was looking shaky. They knew they needed a major change to make their sales targets – so we put a business plan together – and then they went out and convinced an investor to lend them a large wad of cash which they invested entirely in advertising. Yes it’s taking a chance – but it paid off – many times over. And the cost of the campaign worked out be about 8% of the initial sales it brought in…mind you, those new customers will be customers for years to come, and the real cost vs. sales is therefore much lower. But they had to dive in first, and the sales came after.

So the answer to the “what’s the marketing going to cost” is this: “invest whatever you can get your hands on” and base it on “the sales you need to make.” I know it’s not really certain…but if you don’t market at all, you certainly won’t make the sales. So go ahead and make your own rules about what you should spend. If you spend wisely – and the marketing works – you can spend as much as you want. The cost really is up to you!